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Dubai: Building a Corporatist Paradise

History is littered with imagery and symbolism. To encapsulate the raw power of the Soviet Union in 1930s one needs only to look at the city of Magnitogorsk, with it’s brooding smoke towers, streamlined streets and dark factories. It is the perfect embodiment of industry and state authority. Similarly to appreciate the heights to which the British Empire reached in India, at the beginning of the twentieth century. The enormous palaces of New Dehli represent a decadent monument to imperial power and wealth. However these urban meaphores often defy the reality of their period. It is important to understand that much of the economic acheivements of the soviet project were illusionary and built upon a mountain of bodies rather than economic progress. Similally the imperial strucutres of New Dehli where a far cry from the isolated beahheads and rugged hintelrands that made up most of the British Empire. Nevertheless these examples are signficant because of what they represent. This begs the question, is there somewhere today, that fully represents the modern world? Somewhere that truly symbolises the essence of the early Twenty- First century? I argue that there is such a place, and that place is Dubai. Since the 2008 financial crisis it could be suggested (and many have) that Dubai represents to worst excesses of capitalism. The slave labor, the uncontrolled market forces and the thinly veiled social divisions. Yet, this article seeks to explain that rather than describing the modern world explicitly Dubai provides an adequate lens through which to view the early Twenty-First century.

Founding the Corporatist Paradise

Arguably Dubai represents the indulgence, violence and horror of our time. It’s shimmering glass towers and sprawling slave labour camps are the perfect magnum opus of corporatist power. If you want a clear picture of how historians will look at the early Twenty-First century than Dubai is the best place to look. Until the 1990 Dubai was little more than a small fishing town, based on the pearl trade. Yet in the space of 20 years, it has grown into a modern metropolis. The story of Dubai provides a fitting narrative for the modern world. Oil, warfare, state power and exploitation, Dubai has it all. Since 1990 many have seen Dubai as a genuine capitalist success story. Independent and modern. Despite suffering a financial crisis, still growing at around 4% per year. Yet under the surface is a dismal reality of slave labour, US imperial expansion and catastrophic amounts of debt. It is an even more grotesque story for those that live there. No notion of rights and where government actively promotes exploitation and slavery. All disguised under glitzy façade of a modern functioning, capitalist economy.

Firstly we must asses the nature of Dubai’s history and how it cannot be called a free-market, but a crapitalist autocracy. It is a widely accepted myth that the building of Dubai is the fruits of Sheikh Rashid II bin Saeed Al Maktoum and his grand vision. Throughout the 1970s and 1980s Dubai tried to market itself as a great place to do business. The Jebel Ali free zone was established in 1979. In attempt to attract western business. Even throughout the 1980s a period often described as a neo-liberal renaissance, Dubai remained little more than a small desert town. It was only till the UAE sent funds to support the USA and its allies in during the 1990 gulf war against Iraq that Dubai really started to boom. Arguably this fact shows that although domestic economic policy is important in the development of a nation. What was really significant for Dubai and many other developing countries, is that being supportive of western imperial policy is a pre-requisite to prosperity. Furthermore, as is the case worldwide, what development really means in the Twenty-First century is not the growing of native industry, but making a state open to economic occupation by western transnational corporations. It was only after Sheikh Maktoum III bin Rashid Al Maktoum cemented himself as a western ally that the city expanded rapidly.

“Dubai is booming. Economic activity is everywhere. The city center is a construction zone with international hotel chains competing for sites. Hyatt, Hilton, Ramada and Sheraton are already represented; Marriot and Holiday Inn are on the way.”

Ron Gluckman, Hong Kong of the desert?, 1992

Furthermore, when looking at Dubai it becomes immediately obvious that the state is an omnipresent entity that seeps into all aspects of life in the concrete oasis. Johann Hari described Dubai in his 2009 article The dark side of Dubai. “The wide, smiling face of Sheikh Mohammed – the absolute ruler of Dubai – beams down on his creation. His image is displayed on every other building, sandwiched between the more familiar corporate rictuses of Ronald McDonald and Colonel Sanders”. As historians begin to assess the Twenty-First century, the grotesque abuse of state power will be a factor that they cannot ignore in trying to understand the modern era. This is true not just of Dubai but of the entire western world. However the most disturbing aspect of Dubai, is that the ethnic Emiratis are rapidly forming an impenetrable class of self serving public officials. The identity of the Emirati elites that dominate Dubai, is inseparable from the idea of public service and respect for the monarchy. In relation to the Arab Spring “The UAE has seen a trickle of dissent amid a regional torrent. Emiratis are largely well cared for by their oil-rich government and seldom question policy” Financial Times, Arrests in UAE show Sensitivity over reform. “UAE residents pay prices well below the cost of production for electricity, water, food and petrol. Government handouts for Emiratis extend this generosity, as do an abundance of well paid government salariat. Per capita gross domestic product (GDP) averages about $40,200” Protests Fail to Garner Support.

This displays how the Sheiks who rule Dubai have little incentive to provide for those at the bottom of society. They are much less the champions of the capitalist society that they are often described as. Arguably they demonstrate how political elites form a close group of powerful allies and pander to their interest. On a superficial level the rapid development of the Dubaian skyline was not build through a process of allowing a free industrial society to flourish. Its rapid construction is the result of debt and political repression. Ahmed Kannah, professor of International Relations at the university of the Pacific describes how in the Emirati community, working for the private sector is stigmatised. Allegiance to the state has become an integral part of their national identity. Even Adulla Abdelkhaleq Professor of political science at Emirates Univeristy, an influential supporter of the monarchy states thats the midde classes “ are the forces of change, but are also in bed with the regime,” says Abdulla. “They benefit from another and reinforce each other. The middle-class is usualy not revolutionary, they are a moderate kind of people” Protests Fail to Garner Support.

Yet despite the powerful presence of the king. Like the entire Twenty-First century world, his creation is built on top of a colossal mountain of debt. In 2000 two new ‘ free zones’ opened. The Dubai Internet City and Dubai Maritime City. Both allowing for the inflow of more foreign corporations and state run businesses. Countries from around the Middle East have come to describe this method of growth as the ‘Dubai’ model. However it is necessary to stress at this stage that altough every city has a dark past. Most of the urban world today has been build from profit and the success of industry. This is one of the key differences between Dubai and the west. Martin Hvidt of Southern Denmark University shows that in contrast to most western cities Dubai’s authoritarian state is in part, the key to it’s success. “From a statist perspective, democratic or participatory forms of governmental leadership might endanger development in its initial phases because it might divert investment and political focus away from key factors in economic development”. Martin Hvidt, The Dubai Model:An outline of key components of the developmentprocess in Dubai, 2007. To conclude, it is an unfortunate fact, that in the Twenty-First century the state holds the key to success.

Enslaved by the state

It is important to understand that many of the institutions that are fundamental to Dubai’s success are not products of the western world. However to fully understand the conclusion historians should draw about the modern era from assessing Dubai. We must study the role that the state plays in perpetuating the misery of those the work there. Unlike Europe and North America the social institutions of Dubai bolster and support the slave labour system. Yet Dubai desmonstrates how when the presence of an authoritarian state exists. There can be no free- market.It is often that case that those who decry the free-market often associate it with the untold sorrow that large portions of the worlds population live in. Yet after careful analysis it becomes immediately apparent that it is in fact the government that allows for the virtual slavery of thousands of migrant workers in Dubai. Dubai is anything but a truly free-market. Dubai is often regarded as the epitome of the diversified economy. However in reality, it is a cluster of state run businesses and foreign firms that make the lions share of economic growth. Respect for contracts, the right to collectively bargain, the rule of law and competition are all fundamental prerequisites for a truly free-society. None of these exist in the Hong-Kong of the desert.

The Emirati elite stress that these migrants, often of South Asian origin came here of their own free will and can leave at any time. However upon arrival in the UAE, migrants have their passports confiscated, making it virtually impossible to leave the country. Furthermore their earnings are often much less that what was promised or in some cases non-existant. Far from being a meritocracy Dubai’s migrants are often paid according to race and nationality. “The merchant state’s knowledge of them- their country of origin, their health, their capacity for work, the extent of their geographical mobility within the boundaries of the state. Is thorough and sufficient to the task of control” Dubai in a jagged world . Essentially any respect for free-market principles is decidedly missing in Dubai. However, in relation to the desert city’s historical significance it is not unique, “None of this is to say that Dubai or the UAE are peculiar in their exploitation of migrant workers or in the use of nationality, ethnicity and even race to categorize and manipulate the workers. One sees exactly the same arbitrary discrimination and selective imposition of “legibility” on various groups in the supposedly advanced countries of Europe and North America” Dubai in a jagged world. Supposedly slavery and human trafficking are illegal under Islamic law, however those that are exploiting these virtual slaves, are almost always the members of the government. Almost all companies that operate in Dubai are government owned or have close links with the king. As well as construction workers that often die on the job or commit suicide in the sprawling slums of Sonapur, domestic slavery and prostitution is rife in Dubai and actively promoted by the state. “Domestic workers are routinely abused by their employers. From beatings to rape” Nicholas Cooper, City of Gold,City of Slaves: Slavery and indentured servitude in Dubai, 2013. However far from being able to flee such a situation, as would be possible in a free-society. “When women act in response to their abuse they are charged by the government with crimes themselves; effectively women in Dubai face an environment in which they are punished for speaking out in abusive situations.” City of Gold,City of Slaves: Slavery and indentured servitude in Dubai.

Far from being a problem of unregulated capitalism. Dubai’s shameful human right record is the responsibility of its ruling class. “Dubai remains a dangerous place to even report rape. After reporting rape, some women have been arrested for “illegal sex acts,” and women who have been sexually assaulted face the possibility of being punished themselves” City of Gold,City of Slaves: Slavery and indentured servitude in Dubai. Ultimately it is apparent that the depravity and exploitation that exists in Dubai lies in that the state is complicit in these crimes. This is the case around the world. Historians would do well to take this into account. Furthermore it is worth mentioning that when the ruling elite of Dubai are challenged. They often say that without their presence, the country would descend into the hands of bloodthirsty Jihadists. The simlarities between the rulers of Dubai,and the rulers of the western world is astonishing.

Conclusion

To conclude, it appears that just like Magnitagorsk or the palaces of New Dehli. Dubai is the perfect representation of its time. Built from nothing to a sprawlig metropolis in just over a generation. Dubai truly shows the awesome power of the forces that are shaping our world. The cataclysmic debt, the pervaive fist of government authority, exploitation of the people by a bloted ruling elite, tall glass buldings occupied only by wealthy CEOs and state officials and the threat (however real) of terror from an invisible yet persistent enemy. It does not explicitly demonstrate the rest of western civilisation, yet as a historical reference point Dubai has it’s use. Not free in any sense of the word, as we are led to belive. There will be those that will argue that it is one of many examples of the devestating effects of capitalism. But they will be wrong, the overarching presence of the monarchy will ultimatley prove that Dubai was anything but a unhampered free- market.A similar conclusion should be drawn about the rest of the western world. Yey most of the western world has no slave labur camps and we are mostly free to do as we wish. Be that as it may, Dubai’s historical significance as a lens through wich to view the modern world ensures its place in history. Dubai is truly a corporatist paradise.

If anyone has a more general interest in western civilisation and the role historical forces have play in creating he twenty first century Niall Ferguson’s Civilisation is a great place to start. As is Unfinished Empire by John Darwin. Also The Untold History of the United Staes by Oliver Stone and Peter Kuznick provides a merciless critique of the conext of U.S imperialism.

Critical views about Dubai can be hard to find. As most commentators are transfixed with the economic transformation of the desert city. However Dubai, The City as Corporation by Ahmed Kannah gives a compelling critical analysis of the nature of Emirati society and culture.

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10 Comments

I do not think that the building work done in Delhi in the 1920s and 1930s can honestly be described as “decadent” (the designs were of high quality and what was constructed is still in use and admired) – although it could be fairly described as a waste of money (as “reactionary” “old India hands” said at the time).

As for “Corporatism” – it is important understand what this word actually means. It does NOT mean what Hollywood (and the modern universities) say it means. It does NOT mean business enterprises (“corporations”) controlling the government – actually it means exactly the opposite.

Corporatism grew out of German “War Socialism” in the First World War in which NOMINAL private ownership was kept but the state really controlled everything with owners turned into shop managers (for the difference between the economic policy of France and Germany in the First World War, and so on, see Ludwig Von Mises “Nation, State and Economy”).

The leading Italian Marxist Mussolini (senior to Lenin in the international Marxist movement before the First World War) took these ideas and the ideas of the Black Flag “anarchists” and turned them into his “Corporatism” (one of many ANTI Capitalist movements of the time).

The Hollywood view (that many young people are taught ) that “corporatism” and “capitalism” (in fact radically opposed) are the same thing would have astonished anyone who actually know anything about the subject at the time.

The disinformation that one finds on this topic really goes back all the way to Soviet intelligence efforts many decades ago.

The NKVD (and so on) did not want Italian Fascism, German National Socialism (and so on) to be seen as what they were – PROGRESSIVE revolutionary movements committed to SOCIAL JUSTICE and HOSTILITY to capitalism.

So the myth was produced by the Soviets (and pushed by their dupes in the West – such as Hollywood) that Mussolini and Hitler (and even people like Mosley in Britain and Father C. in the United States – the anti-Semitic publisher of “Social Justice” magazine in the 1930s) were really the “tools of the capitalists” – and “Corporatism” has its meaning changed (thanks to these Soviet backed efforts) from the domination of business enterprises by the state to the other way round (a false 180 turn).

For the truth see such works as “The Road to Serfdom” by F.A.. Hayek and “Omnipotent Government” by Ludwig Von Mises.

As for Dubai – its (statist) economic development has got noting to do with “American Imperialism” and the other stuff that Mr Lee comes out with.

It is, in fact, a “Grand Folly” – the spending of vast amounts of money (by the government) trying to build something in a very small country (the capital of New Delhi was and is the capital of one of the most populated lands on Earth) that would astonish the world. It is naught to do with capitalism or whatever Mr Lee thinks it is to do with.

Perhaps Mr Lee’s most revealing comment is his endorsement of “COLLECTIVE BARGAINING”

As competent economists have been pointing out for hundreds of years – “collective bargaining” by unions does not (CAN NOT) benefit all “workers” at the expense of “the capitalists” – what it in fact does is benefit union members (normally the best paid people to start with) at the expense of other (more poorly paid) workers – such as the “saves” about which Mr Lee expresses such touching concern (they would find themselves “liberated from their slavery” by being sent back to India, and to more poorly paid local employment).

Libertarians and Classical Liberals that, in the long run, “collective bargaining” does not even benefit union members – as it undermines the industry they work in.

One would expect someone who claims to be a libertarian to at least be familiar with the works of Ludwig Von Mises and the other Classical Liberal economists (the real works – not the out of context stuff produced by the “libertarian” left), but if people really do not want to read Mises, Hayek and so on……….

W.H. Hutt’s “The Strike Threat System” will do (indeed more than do) – as it shows both how harmful “collective bargaining” is, and shows that collective bargaining actually depends on STATE INTERVENTIONISM.

Mr Lee talks of a “free market” – but in a real free market the reaction of an employer to the news that some of his (or her) employees had joined a union would be “so what?”.

An employer certainly would not “meet with the representatives of the workers” in order to decide wages and conditions.

In a free market wages and conditions are decided by supply and demand – nothing to do with “elected representatives of the workers” and their paramilitary tactics of “picket lines” (i.e. trying to smash the heads in of workers who try and “take the jobs” that “belong” to the members of the union).

The United States achieved the highest wages of any major nation in the world long before “collective bargaining” was established. Indeed the industries in which collective bargaining has been established have then gone into DECLINE in the United States.

But then the enemies of “capitalism” whether they follow the Red Flag or the Black Flag (in theory different but in practice the same – as one can see from their active cooperation in everything from the “Occupy” movement to the Chicago Teachers Union) tend to be as ignorant of history as they of basic economics.

As for “collective bargaining” among government workers.

This is essentially a criminal conspiracy between politicians and unions to LOOT THE TAXPAYERS.

Even Franklin Roosevelt (not known as a friend of “capitalism”) was totally opposed to collective bargaining among government workers.

The support of the Black Flag (“anarchists”) for government worker unions (such as the Teacher Unions) shows that in practice (whatever the difference in theory) there is no difference between Black Flag types and Red Flag ones.

Something that has been known to active Cong hunters in the United States since the Red Terror after the First World War where it was found that many of the terrorists (who sent letter bombs to blow people’s faces off, and so on……) claimed to be “anarchists” rather than Marxists. Yet their supposed enemies (the Marxists) sprang to the defence of these “anarchists” when they came to trial for murder and so on.

The “liberal” elite also tended to spring to the defence of “anarchist” murderers (people who were GUILTY – see Jack Cashill “Hoodwinked”).

This was an early indication of the total transformation of “liberalism” from a pro “capitalist” (i.e. pro large scale private ownership of the means of production, distribution and exchange) to an anti “capitalist” force.

It was not long before Hollywood (and so on) was making endless films and (eventually) television shows filled with Marxist agitprop (the rich and “the corporations” control the government, they are the cause of poverty…… and other lies) under the mask of “liberalism”.

Eventually these lies (such as that Fascism and National Socialism were the tools of “big business”, that “collective bargaining” is a good thing – and on and on) became mainstream in the schools and universities also.

Which is why I must be careful – for it is possible that Mr Lee has no evil intent, and is simply (and in all good faith) repeating the stuff he has been taught.

I’ve not met Jordan, but I don’t think his brief mention of collective bargaining is as reliable diagnostic tool as you suggest. I for one support the right of workers to collectively bargain even if I do not like any particular union, or laws favourable to unions, or indeed the lack of independence and confidence in a man that union activity is a symptom of. The right to collectively bargain is a subordinate to a man’s right to free speech and freedom of action generally, and if it is a mistake economically then it is theirs to make.

Nor do I think it is a prerequisite to read a whole reading list of specific books before taking part in a conversation about history and economics. Jordan has obviously read widely before penning the essay.

Were Jordan to be coming here and calling Dubai an exemplar of modern free market capitalism I would correct him, but he isn’t, he’s diagnosed it’s problems as arising out of the power of the monarch and the elite. Nor did he, I think, get the power relationships wrong in the concept of corporatism, as you seemed (at length) to suggest.

I did pick up on the idea, alluded to a few times in the peice, that the western corporations are part of the problem. He does not back that up, and you did not mention it either.

Simon if you read my last comment (or even the end of the one you are looking at) you will see that I do NOT regard Jordan’s endorsement of Collective Bargaining (i.e. the system of threats and violence backed up by state interventionism – for example the regulations against just sacking strikers in various Western countries) as a reliable diagnostic tool.

On the contrary it could just be an ERROR (there is, of course, no “right to bargain” with someone who does not want to bargain with you – who just wants nothing to do with you and would prefer to employ someone else).

Mr Less could simply be repeating what he has been taught (which is unlikely to have included the true nature of “collective bargaining” – how it is based upon the implied threat of force, and backed by state interventionism) .

I actually suggest a more reliable diagnostic tool in my last comment.

In theory leftists could be trained to give a false response – to pretend to like people such as Jon Huntsman (senior) and Charles and David Koch (when the actually want to rob and murder them). But it is interesting how often their hatred burns through – leftists often betray themselves when asked quite simple questions.

I did not want to respond to the last point you made, but perhaps I will.

It is not my habit to greet people who volunteer to contribute here with suspicion and examine every sentence they write for ideological purity, nor really do I want commentators to do the same. I see the value, the left have a habit of trying to infiltrate institutions, but it is impolite. It result in the Jordan’s and Zach’s of this world staying away and being reticent to blog.

So, sure raise any concerns you have with a brief comment (it is easier to understand your concerns if stated breifly) and please trust that I will read it (again, easier if is brief) and I will act if necessary.

For now, I am inclined to give Jordan the benefit of the doubt and disinclined to subject him to psychological tests.

If you have anything further to add, perhaps we should carry on discussing this problem in a phone call?

While I appreciate your comments, Paul Marks, I couldn’t possibly address all of them. As Simon kindly points out I am not stating that Dubai is a working example of ‘capitalism’. But please allow me to clear up a few things.

I believe that the way in which I use the word ‘corporatism’ is justified. I am fully aware that corporatism means the state ultimately holds real power and don’t define it as companies holding government to ransom. To a certain extent, increasingly so throughout the 20th century the state acts as an institution the distributes power on it’s own terms. Ultimately positions of influence depend on state backing. Dubai demonstrates this system par excellence. Yes corporatism found influential supporters amongst the fascists of the 20s & 30s. This is why we should be worried about the relationship between certain companies and powerful government bodies. What should worry us more is that this is increasingly seen as real capitalism.

With regard to the opposition raised over the right of workers in any economic circumstances to withdraw their labour. You will find from reading any credible Austrian economist that although it may harm their long term interests, the idea of collective bargaining plays an important part in any civilised society ( read Mises human action & Hazlitt economics in one lesson). This is not necessarily strike action, it may mean employees ensuring that their employer adheres to their contract appropriately, or requesting that as market prices for their output increase… So do their wages. Far from being a communist ideal. This would form the basis for a functioning free market. This is NOT happening in Dubai.

Lastly, I will answer the question about my opinion on the Koch brothers and Mr. Nelson. I would argue that the activities of these men define corporatism and the depraved depths to which our governments have sunk. I am certain it does not make anyone a ‘Marxist’ to assume that a group of immensely wealthy men should not hold huge amounts of power in the dingy realms of government? Let CEOs make as much money as the free-market deems necessary. But actively using the state & influence over policy to achieve economic supremacy. This is surely the antithesis of a truly free-society?

It is interesting that you regard the “activities” of Mr Huntsman of Huntsman Chemicals and Charles and David Koch as “defining corporatism and the depraved depths to which our governments have shrunk”.

As for Ludwig Von Mises and Henry Hazlitt believing that employers should be FORCED to employ people they do not wish to employ (which is what “Collective Bargaining” is based upon) that is a new one on me

However, the basic fact remains that union collective bargaining (the “Strike Threat System” and the state interventionism it depends on) is an unemployment creating machine.

It is true that in the short term it helps union members (at the expense of the people made unemployed), but in the longer term even the union members lose – as the industries it undermines decline.

Still it was your first point (your attack upon Jon Huntsman, senior, and Charles and David Koch) that told me all I need to know about you.